/ . — I fiLE COpy Walston &Co. Inc Members New York Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CI-YCAGO OFFICES COAST TO COAST AND OVERSEAS TABEll'S MARKET lETTER August 3, 1962 After reaching a new high of 601. 15 early in the week, the Dow-Jones Industrial average failed to follow through, and our breadth index mirrored this action, also fail- ing to better its early July high. A further attempt at an upside penetration by the Indus- trials and! or the breadth index, is to be expected in the future. Far more important than guessing what the market is going to do, however, is being prepared to take prOp2r steps whatever it does. Basically, this letter continues to feel that the 650-550 range will contain the market over the near future. Accordingly, we would advisesale of ifisues on to th, 600-650 area, and pur- chase of stocks which appear to be of sound value, on weakness into the 600-550 range. Accelerated depreciation schedules have already been enacted and, although an immediate tax cut remains a question mark, the possibilities remain good for some futuI'E tax reform. These measures will have an appreciable effect on company earnings and the effect will vary with each individual company. It will necessitate a much closer look at cash flow or cash earnings. Cash flow consists of net earnings plus depreciation. In re- cent years, cash flow earnings have been increasing at a greater rate than reported earn- nings. In the four-year period between 1947 and 1950, cash flow earnings on the Dow- Jones Industrial average were about 340/0 above reported earnings. In the most recent four-year period between 1958 and 1961 cash flow earnings averaged 750/0 above reported In 1950, the earnings on the Dow-Jones Industrial average were 30.70. Eleven years later, in 1961, reported earnings were 31. 83 or an increase of 3.60/0. Cash flow earnings on the Dow-Jones Industrials, however, increased from 40.85 in 1950 to.57.25 in 1961 for an increase of almost 400/0. It is, of course, arguable that an increase in necessary. The main object of a depreCiation allowance is to allow !or 0'(' quipment as it wears out, and it is certainly true that in most tak reater replacement a ghTen level of earnings the sharp lncrease ln cash flow as th .. rmngs over tile past ten – years is rather dramatic. Standard & Poor's vWin eDe, ng advertisement in some of last Sun- day's newspapers relative cash flow and the effect of accelerated de- preciation and pOSSilel ed tit5ns on earnings and dividends. As an example, a hypothetical co ' e 5 lllion before taxes and depreciation. It s deprecia- tion, figuring a 0 years, was 50 million. Assuming a capitalization of ten million r Led net ea rnings were 4.80 and cash flow earnings were 9.80 under the pres 20/0 corporate tax rate. With the rec ntly accelerated depreciation, the company uses a twelve-year basis for depreciation instead of fifteen years. The result would be a lowering of reported earnings to 4.32 a share, or On the other hand, cash flow earnings WJ uld be 10.82 or an increase of If there is a reduction in the corporate tax rate from 520/0 to 470/0, the effect could be quite material. In that event, reported earnings WJ uld be 4. 77 a share or about the same as the present 4. 80, but cash flow earnings would increase from 9.80 to 10.77 a share. If, in addition, the pending Incentive Credit of a 70/0 tax write-off on the cost of new equipment were enacted, it would add another a share to cash flow earnings. Cash flow earnings are important as far as dividends.are concerned. In the pertod between 1948 and 1961, the dividend payout on the reported earnings of American corporations varied over a wide range between 350/0 and 660/0. The payout rate on cash earnings, however, was very steady during this same period. It varied only from 270/0 to 330/0. As- suming a 300/0 dividend payout of cash earnings on the hypothetical company mentioned above, and no change in earnings before taxes and depreciation, the result would be a 2.94 dividend on the present 9.80 a share cash earnings, a 3.09 dividend under the new depreciation schedule, and a 3.51 dividend if the corporate tax rate is reduced to 470/0. As mentioned above, the results will vary with each company. Some companies will in reported earnings and little savings in depreciation, while other com- pames will show lower reported earnings but better cash flow and have better dividend coverage. Dow-Jones Ind. 596. 38 EDMUND W. TABELL Dow-Jones Rails 122.26 WALSTON & CO. INC. This market letter is not, and under no circumstances 18 to be eonstnIed 811, an offer to Bell or a soliCitation to buy any securities referred to herein. The information contained herein 18 not guarAnteed 8.11 to accuracy or completeness and the furnlahmg thereof IS not, and under no drcumstanees is to be construed M, 0. rePresentar tlOn by Walston & Co., Inc. All expressions of opinion are subJect to change without notice Walston & Co. Ine. and Direetors, Stoekholdere atld Employees thereof, purchase, sell and may have an interest in the securitl8 mentioned herein. Thie market letter is intended a.nd presented merely &8 8. general. informal commentary on day to day market news anq. not as a complete anab'lIls. Additional mformatlon With respect to any seeurltles referred to herein will be furnished request. . WN 301 – …… – ' -C 0-

Walston &CO, —-Inc —– Members New York Stock Exchange . COpy NEW YORK ' SAN fRANCISCO LOS ANGELES ' PHILADELPHIA ' CH.lCAGO OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER August 10, 1962 A superficial observation of the market for the past week would inaicate that it was a trendless affair with little or nothing happening. This is certainly true of the act- ion of the various averages. If, as we believe, the market is in the process of forming a long-term accumulation base, any attempt to forecast the shorter-term fluctuations of the averages is a rather futile and meaningless endeavor. However, if you look below the surface of general market action and observe the price patterns of 1500 individual stocks, you will find that lots of things are happening. Some stocks have had little or no rally from the lows'of May andJune-and some are still miJ.jdng.new 10ws.Ontheother.,ha.nd, many issues have rallied sharply and some are close to their old highs. Even in theshort- period of a little over two months, a sizable number of issues have formed substantial base pa tterns The present seemingly dull market presents a marvelous opportunity for the investor to upgrade his portfolio while taking advantage of tax saving sales. The backing and filling and temporary fits of optimism and pessimism are the necessary ingredients of forming a base. It is from such patterns that the bull markets of the future are made. One of the groups tha t appears to be in the process of forming a potential base is the savings and loan issues. Just as a bull market eagerly grasps and inflates every minuscule item of good news, a bear market recognizes only unfavorable developments., and often fails to recognize positive factors within a company or industry. The S & L's are a case in point. The growth shown by these associations over the past few years is, by every j standard, astounding. Most companies in the field have doubled earnings in the past five years, and earnings increases of 500 over the same smaller companies. No one familiar with Rnusual among the c io lls..'!9t Ca ifornia and the Western states could fail to doubt that the future . cre savings and in- . at pnces whlCh dIscount theIr 1961 higns jor 0 . – – now , ,- Unfavorable news and p the savings and loans companies .in recent months. First and fore 0 i t factor. To date, the S & L's by virtue of a law which I substantial bad debt reserve, have been virtually free from ta en't, no one is sure just what sort of tax reform bill will emerge 0 t e s' al labyrinth, but it is quite certain that some tax will be imposed 0 g n an earnings. Although imposition of the full 52 corpo- 'rat;'tax is a possibi ty, doubtful that this will take place, and an effective tax rate of betw.een 20 and 3 s considered most likely. Other problems which have plagued ,the Associations inc ude increased competition from commercial banks, the high cost of attracting savings; which has, of necessity, put pressure on profit margins, a slightly increased forec1usure rate, burgeoning administrative costs and a temporary slowdown in housing starts. – Yet how low must the market go before these negative factors are discounted The average S & L stock is now available at ten times untaxed 1961 earnings and, in rna cases, less than that multiple of estimated 1962 results. Assuming the most likely tax action, and adjusting 1961 earnings therefor, multiples would rise to around 15 and allow ing for the unlikely imposition of the full corporate tax rate, PiE ratios would be some- where in the low tomiddle 20 'so This, let usrecall; is for an indblstry which has been able to increase earnings, on the by some one-third annually over the past five years. Undoubtedly, due to the factors mentioned above, rowth may slow down, but it is hardly likely that the earnings curve Will flatten out enougll to justify present multiples That some investors have come to recognize this fact is emphasized by the sub- stantial potential bases which most savings and loans companies have formed in the past few months. Great Western Financial (19), suggested for sale by this letter last year at 47 3/4, has an upsIde oOJecnve, from a techmcal viewpoint, of 35 if 25 is reached. Relurchase is recommended. LikeWIse recommended is First Charter Financial (31), in WhICh acceptance of profits was recommended a year ago at 51 1/ 2, Ablutyof thIS issue to.reac 39 would, technically, indicate a possible 47. Other savings and loans with attractive po- tential patterns include California Financial, Financial Federation, Gibraltar FinanCIal, Trans-World Financial and United Financial. Dow-Jones Ind. 592. 32 .. JeRQ8 Ra;i.;ls 119 54 EDMUND W. TABELL WALSTON & CO. INC. ThIB market letter is not., and under no circumstances 15 to be eonstrued as. an offer to sell or a solicitation to buy any aecurities referred to herein. The information contained herem is not guaranteed 8.B to accuracy or completeness and the furnishlnR' thereof is not, and under no circumstances le to be construed as. a representa tlon by Walston &; Co. Inc. All expressions of OPinion are subJect to change without notice. Walston & Co. Inc. and Officers. Directors. Stockholders and Employees thereof, purchase. sell and may have an Interest in the securities mentIoned herein This market letter IB intended and presented merely as a general. informal commenta.ry on day to day market neW!! and not as a complete analYBIB. Additional mformatlon with respect to any Becurities referred to herein wUl be furnished upon r e q u e s t . ' WN 301

FILE COpy Walston &Co. Inc. Members New York Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CH.lCAGO OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER August 17. 1962 The market moved above the early July resistance level at 600 to reach an intra-day high of 611.15 () on the Dow-Jones Industrials. As mentioned in recent letters. the up- potential is the 620-650 range. So far. our breadth index has failed to confirm the lu,lsi.de breakout in the averages but it is now very near its early July high. The pattern Imal'I71C1UaLl stocks is quite varied with some issues showing fairly substantial upside potenlcU;) and others quite negative. Much more important than the nearer-term action of the market is the longer-term T.he stock ,market re.ached a major.top .in.November u.r.la Average sold at an intra-day high of 741.30. This major top was accompanied a historically high price to earnings ratios and historically low yields. It was also by fantastic overspeculation in glamour stocks and new issues of third and grade companies. The sequel to the overvalued market of 1961 was a decline of 290/0 to a low of 524.55 in The decline was greater than any decline since 1937. From a technical viewpoint. e averages and many individual stocks reached the maximum downside objectives out- Ilinled by the 1961-1962 tops. The speculative excesses in glamour stocks and new issues IWf'rl largely liquidated as were many unsound credit situations. There probably will con- I'lilue to be occasional repercussions from the unsound overspeculations of 1961 but the IHeU'l' appears to have been accomplished. It is probable that the June low was a or bottom. Obviously. after a drastic decline that corrected the speculative excesses of recent the market is not going to make the same mistake and immediately become over- again. Any important rise in market values will hO by a sub- ItantiaLl rise in earnings and that does not appear to in c e irnmediate It may be quite some time before the 1961 ed must be remember- tlfffi2-that the high was reached only nine months 't.hWlPre . the e'out-it took two years after 1956 top for the industrial . erritoryand it was a year and a after the 1959 top before t e ew high. Going back to the 1946 toP. was well over three years 0 reached. In many ways. from a technical 0t e t' icates the possibility of forming a pattern simi- to 1946-1949 a 0 t d may be shorter. After reaching a high of 213 in pril of 1946. the a e e ed 250/0 to reach a new low of 160 in October of the same This low held r three years while the average backed and filled in a trading between 160 and From a technical viewpoint. the bases formed during this U..'U1 the foundation or the long-term advance that started from the 1949 lows. While it naturally would be quite foolhardy to assume that the present market pattern be exactly like 1946-1949. the broad outline may be quite similar even though the ec(m-i IUl1l1; background is entirely different. A trading area similar to 1946-1949 would result in trading area between 525 and 640 in the present market. While this is a broad pattern the general market the action of individual issues will be quite different. Just as in 6-1949. some individual issues will reach new highs and others will reach new lows des ite the fact that the averages remain in a trading area. Probably. as a starting point for selecting longer-term holdings. it would be wise to a good look at the issues that did not their 1960 lows in the recent.decline the fact that the June low in the Industrial Average was 525 as compared to 565 in 1 sually. a good fundamental reason is behind this favorable relative strength action. It is our belief that the trading area of next two or three years will result in the foun- I',,UH for a broad long-term advance. Proper selection of issues could result in purch- s at low levels that may not be seen again in an investment lifetime. Dow-Jones Ind. – 610.02 Dow -Jones Rails – 121.44 EDMUND W. TABELL WALSTON & CO. ,INC. Thill market letter 111 not and under no cIrcumstances IS to be construed as, an ot'fe!;' to sell or a solicitation to buy any securities referred to herein The Information contained herem 111 not as to accuracy or completeness and the furnlshmg thereof 18 not, a.nd under no clreumstanees 18 to be construed M. a represent&.- t by WAlston & Co Inc All expressIOns of opmion are subJect to change wlthout notice Walston & Co, Inc, and Officers, Directors, Stockholders and thereof sell And may have an mterest in the securitIes mentIOned herein This market letter IS mtended and presented merely as a general, mformal commentM-y on day to day market news an4 not as a complete analySIS Additional informatlon With respect to any securities referred to herein furnished upon requeat.

FILE COP' Walston &Co. I nc. Members New York Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CHICAGO OFFICES COAST TO COAST AND OVERSEAS TABELL'S MARKET LETTER August 24, 1962 At the week's intra-day high of 622.02, the Dow-Jones Industrials reached the lower part of our 620-650 upside objective. Some consolidation is to be expected, but the technical pattern gives no indication of any great vulnerability at the moment The breadth index has confirmed the rise in the averages by also moving above the early July high. Volume indications are favorable and it would appear that the selective advance could COil tinue to the upper portion of the 620-650 area. Patterns of individual issues are quite di- verse, but most stocks that have formed potential base patterns since May have not yet Iached their have been formed as .. . ' In the three months since May, quite a-few individual issues have built up size- able potential base patterns. In some cases these base areas have been penetrated on the upside and, from a technical viewpoint, indicate higher levels over the intermediate term. Air Products & Chemical (59) is an example of this type of technical action. The company speCializes in cryogenics (the low temperature proceSSing of gases and liquids). Its growth rate has been well above average. The stock, listed on the New York Stock Ex- change, reached a high of 861/2 in 1961. The downside implication of the 1961-1962 top was, from a technical viewpoint, a decline to the 46-40 level. A low of 41 1/4 was reach- ed in May and a sizable base area was formed in the 42-55 range and recently penetrated on the upside. Earnings for the fiscal year ending September 30th are estimated at about 3.00 a share compared to 2.47 in the 1961 period. Cash flow earnings for the 1962 fis- cal period are estimated at over 6.00 a share. Dividend payments are nominal at annually, plus a 2 stock dividend in March, 1962. The stock is recommended for longterm growth. Alside, Inc. (27) also has built up a sizable potel is the leading factor in the aluminum siding industry and 0 pattern. The company one-third of the domestic market A recently organized u s diar lside Homes Corporation, is scheduled to begin production of an alumi mass produced home 'in the laterpartJf'this yea'l'The -11 – … downside objective of the reached in May. A potential base ar work. A low of 20 was e iJe; ed in the 20-28 area. An upside pene tration of this area nA t' e technical point of view. The stock is speculative and is 0 in e non to its present earnings. Earnings for the fiscal year Class B common tl.' ..1 , were 81 on the combined Common stock and 1 or the nine months ended June 30th, 1962 were compared to in\)611 R O. There are 503,430 shares of common stock listed on the New York Stock Exch and 1, 364,480 shares of Class B Common stock, unlisted. The Class B stock is cIo ely held and convertible into common. The stock is recommended as a long-term growth speculation. Universal Oil Products (34 3/4) has also built up a sizable potential base pattern in the past three months. The company is engaged in research and development in the petroleum, petrochemical and chemical fields. Royalties, engineering and services ac- count for over 600/0 of gross profits with the remainder from product sales and construct- ion. Reported earnings for 1962 are not expected to show much change from the 1. 58 re- ported for 1961 because of a strike early in 1962, and other reasons, but earnings are expected to rise sharply in 1963. Cash flow earnings are substantially above reported torearnings. The stock,reached a I!igh of 691/2 in 1961. The 1961-1962 indicatei, from a technical' viewpoint, a decline to 27. The May-June low was only 30 1 4, but there is a strong support level at 30-25. Since June, the stock has held in the 31-37 range. Purchase is recommended for long-term growth. Three stocks already on our recommended list have also built up substantial potential base patterns from a technical viewpoint. Burroughs (38 7/8), declined from a high of 523/8 to a low of 325/8. A substantial base was formed in the 33-39 range. This has been penetrated on the upside. Despite slow recent action, the technical pattern suggests higher levels. Cluett Peabody (39 1/2), which declined from 53 to 32, also has built up a substantial potential base in the 32-42 range as has J. Ray McDermott (237/8) in the 20- 25 area. EDMUND W. TABELL Dow-Jones Ind. 613.74 WALSTON & CO. INC. Dow-Jones Rails 124. 34 ———————————————————–.. —Thill market letter is not, and under no circumstances III to be construed 1lS, an offer to sell or a solicitation to buy any securities referred to herein. The Ini . lon contained herein 111 not guaranteed u. to accuracy or completeness and the furnishmg thereof is not, and under no ill to be.conlltrued all, a reprea…ta- tlon by Walston & Co, Inc. All expressions of opinion are subJect to c;hange without notice. Walston &.Co, Inc., and OffiCers; Directors, Stockholders and Employees thereof, purehasc, sell and may have an mOOrest in the securities mentioned herem This market letter ie mtended and presented mer!!ly as a general, mformal commentary on day to day market news anlj not as a complete analYlliB. Additional mformatlon with respect to any securities referred to herein will be furnishl!d UK)n request. WN 301 L

— FILE COpy Walston &Co. Inc Members New York Stock Exchange NEW YORK SAN FRANCISCO LOS ANGELES PHILADELPHIA CI-UCAGO OFFICES COAST TO COAST AND OVERSEAS TABEll'S MARKET lETTER August 31, 1962 After reachmg the lower part of our projected advance to the 620-650 level at last week's high of 622.02, the Dow-Jones Industrials declined to an intra-day low of 598.81. This is normal technical action. The decline was halted at the upper part of the 600-580 support level. Volume dropped off during the selling period. Thursday's trading volume was the smallest in over three months The breadth indices showed above aver- age action during the week. Friday's advance of 6. 86 points retraced a good part of the 11. 42 -point decline of the first four days of the week. I would expect the advance to go on to the upper part of the 620-650 area. Friday's rally was led by the savings and loan issues;Tliis gFOup wasrec6mmendtmih-'ouy-Ietter of – The shares of the paper companies have been showing below-average price action since 1956. Prior to that time, the papers had been among the leaders of the rise from the 1949 lows. After the stodgy price performance of this group over the past six years, it is difficult to realize that International Paper, after adjusting for stock dividends rose from a 1949 low of 3 1/4 to a 1956 high of 42, or an advance of over 12000/0 as compared to the 350/0 trading area in which the stock has held since 1956. The reason for the poor performance of the paper stocks in recent years is not difficult to find Since 1955, the industry has increased capacity at the rate of about 50/0 a year while sales have advanced only about 30/0 a year. This has resulted in overcapacity and price cutting and lowered profits despite increased sales. Figures from the American Paper & Pulp Association indicate that capacity in 1962 will be up only 2. 40/0 from 1961. Present plans call for a rise of 1. 60/0 in 1963 and 1. 30/0 over 1963 in 1964. If production I and consumption continue to increase at the rate of the past several years, the gap bet- I ween capacity and production will gradually be closed price conditions will be improved This has already been reflected in imp vi ni9gs for the first half of 1962. In most cases, the paper stocks are w r ar trading areas they have occupied for SlX years. Even a rise to p t e six-year level would result in sizable percentage . I . , ing issues covering vanous segmen Sel d i s appear to be at a buying -inc .- while you waTt.- Thefollow-' er J6dUstry and related fields are recom- .– , mended. Crown Zellerbach e West Coast paper company I troubles k 1962 earmngs somewhat, but estimates are around 2.50 pe a , and 1961. The yiel s -4 30/0 to 2 33 in 1961 The stock sold above 60 in 1956 Dominion Ta't- emical (16 1/ 2) is one of Canada's ten largest companies. While not entlrely company, 640/0 of sales are pulp and paper with 200/0 in building materials and 160/0 in chemicals Earnings for 1962 are estimated at 1. 50 compared with 1. 29 in 1961 Yield is 4.40/0 before Canadian withholding tax. The stock is llsted on the American Stock Exchange. Great Northern Paper (37 1/2) is the largest independent newsprint company in the U. S. Owns over two million acres of tlmberlands. Also is large producer of specialty papers which are an increasing percentage of sales. Reported earnings are around the 3.00 per share level, but cash flow is over 9 a share. The company pays 1 00 to yield 2.70/0. The stock sold at a high of 108 1/2 in 1956. Rayonier (18 3/4) is the world's leading producer of highly purifled pulps used in the manufacture of textile fibers, tire cord, cellophane and photo film Additimal products are paper pulps, fine papers and lumber Earnings for the first half of 1962 were a share compared to 62' in the 1961 period The sto'ck yields 4.20/0 on the 80 annual divi- dend 30/0 stock dividends were paid in 1959,1960 and 1961. Foreign sales are now about 400/0 of volume and should increase as world-wide demand for purified pulps is expected to widen. Union Bag-Camp Paper (36 1/8) is the result of merger in 1956 of Union Bag & Paper and the Camp Mfg. Co. The FTC has brought suit against the company to break up this merger. Final outcome of this suit 1S uncertain. Earnings of the company have held up relatively well compared to other paper companies. Estimated earnings of 2. 60 for 1962 would be the best since 1956. The yield on 1. 50 dividend is 4.20/0 Dow-Jones Ind. 609. 18 Dow-Jones Rc Us 123.75 EDMUND W. TABELL WALSTON & CO. INC. This market letter is not, and under no circumstances 15 to be construed as, an offer to sell or n lIolicltation to buy any seeurities referred to herein The information contnmcd herein 18 not guaranteed lLB to accuracy or completeness and the furmshlng thereof IS not, and under no Circumstances IS to be construed as, a representa tion by Walston & Co, Inc All expressIons of opimon are subJect to change without notice. Vfalston & Co, Inc, and Offlcera, Dlretora, Stockholders and Employees thereof, purchase, sell and may have an mterest In tne securities mentIOned herem ThiS market letter IS mtended and presented merely as a InOIml\! commentary on day to day market news ang not as a complete analYSI!; Additional Information With respect to any securities referred to herem furDlshed up()n request.